The private prison industry's immigration boom

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Rina Palta of Multi-American's sister blog The Informant, which covers crime and courts in the Bay Area, has pulled together some good recent reports on the business of immigrant detention, for-profit private prison companies that contract with the federal government to hold immigrants who are awaiting or fighting their deportation.

The post cited a particularly good detailed story in Business Week, which described profits earned by industry leader Corrections Corporation of America (CCA) and competitors:

Tougher policies have been good for CCA. Since the company started winning immigrant detention contracts in 2000, its stock has rebounded from about a dollar to $23.33, attracting investors such as William Ackman's Pershing Square Capital Management, which is now its largest shareholder.

CCA has current contracts with ICE and other federal clients, as well as 19 state prison systems. Its largest competitor, the Geo Group (GEO), is slightly smaller, and together they account for more than $3 billion in gross revenues annually. The next-largest player, MTC, is privately held and does not disclose numbers, but the industry as a whole grosses just under $5 billion per year.

Once in a slump, the private prison industry has boomed in the post 9/11 era thanks to immigration contracts. Private immigrant detention was a topic I followed closely while working in San Diego, where CCA operates a large detention center that it contracts to U.S. Immigration and Customs Enforcement. Much of the current scrutiny of the immigrant detention system grew out of complaints that came out of the San Diego facility, starting with a lawsuit initially filed by a detainee alleging severe overcrowding.

Among other things, the lawsuit alleged that because CCA received a per-diem fee for each person housed in the facility, financial gain played a part in the crowding of three people into two-person cells after CCA lost some of its bed space. From one story:

In June 2006, the company lost 200 beds when the lease on part of the county-owned property expired. Yet according to CCA's 2006 financial report, the population of detainees wasn't reduced “as we had the ability to consolidate inmates.”

The following January, in its lawsuit, the ACLU cited the per-person fees paid by ICE to the contractor as an incentive for putting three people in a two-man cell. The third slept on the floor in a plastic cot referred to as a “boat.”

Lead plaintiff Isaac Kigondu Kiniti, a Kenyan detainee in ICE custody since 2004, said his head was so close to the toilet when he slept on the floor that he was showered with urine when cellmates used it.

There are a handful of ICE-run detention facilities around the country, but not enough to accommodate the demand. Using contractors also saves the government money. In fiscal year 2007, it cost roughly $119.28 a day to hold someone at an agency-operated detention center, according to ICE. It cost $87.99 on average to hold someone at a contract facility, a savings of more than $31 per day.